Photo/IllutrationThe Tokai No. 2 nuclear plant in Tokai, Ibaraki Prefecture (Asahi Shimbun file photo)

Japan Atomic Power Co. is preparing to apply for a 20-year extension to operate the aged Tokai No. 2 nuclear plant beyond its 40-year life span, sources said.

Such an extension would be the first among Japan’s aged boiling-water reactors, which include those at the crippled Fukushima No. 1 nuclear power plant.

Tokai No. 2 nuclear plant’s reactor, which went into service in 1978, is in a heavily populated area not far from Tokyo.

The company deems the 20-year extension of the plant in Tokai, Ibaraki Prefecture, as imperative to securing a stable revenue stream, the sources said.

However, the plan is expected to bring a host of challenges to the operator.

One is how to secure funds so as to cover the costs to improve safety at the old facility required under the more stringent nuclear regulations set after the 2011 Fukushima disaster.

Another is to ease concerns of local governments of the area where nearly 1 million residents could be affected in the event of a serious accident.

The move toward the extension comes as the Nuclear Regulation Authority is set to rule that the plant has met standards set in the new regulations necessary for a restart, the sources said.

The Tokai No. 2 plant, about 120 kilometers from the heart of the capital, houses one unit capable of generating 1.1 gigawatts.

If Japan Atomic Power proceeds with its plan to apply for the extension, it needs to submit the application to the NRA by Nov. 28.

The Tokai No. 2 plant narrowly escaped a catastrophe like the one at the Fukushima No. 1 nuclear plant when it was struck by the magnitude-9.0 Great East Japan Earthquake and tsunami on March 11, 2011.

It took Japan Atomic Power three and a half days to shut the reactor down when the disaster knocked out power. One of the three emergency generators installed there became dysfunctional after they were submerged by tsunami.

Some experts said it could have become impossible to keep cooling the reactor if the tsunami had been 70 centimeters higher.

Japan Atomic Power is keen to extend the operation of the Tokai No. 2 nuclear plant as the facility is the only venue that will feasibly bring it revenue.

“It has no option but to apply for the extended operation,” said an official familiar with the management of the company.

Apart from the Tokai No. 2 nuclear plant, Japan Atomic Power owns three other reactors: one at the Tokai nuclear plant, also in Tokai, and two at the Tsuruga nuclear plant in Tsuruga, Fukui Prefecture.

The one at the Tokai nuclear plant and one unit at the Tsuruga nuclear plant are on their way to being decommissioned.

Prospects for whether the company can win approval for a restart of the remaining reactor at the Tsuruga nuclear plant are bleak, as it has been reported that the facility was likely built on an active seismic fault.

If the company pulled the plug on the Tokai No. 2 nuclear plant, it would mean that it would be left with no revenue sources.

That expected management crisis could likely affect the bottom line of utilities such Tokyo Electric Power Co., the operator of the Fukushima No. 1 nuclear plant, which has a stake in Japan Atomic Power.

The Tokai No. 2 nuclear plant supplies power to TEPCO and Tohoku Electric Power Co., and although extending its operation would keep those revenue sources open, it would also come with a huge price tag.

The company said Oct. 26 that the estimated costs of the safeguarding measures for a restart of the plant will balloon to about 180 billion yen ($1.58 billion), more than double the 78 billion yen projected initially.

The total sum is expected to further increase if Japan Atomic Power chooses to operate the plant beyond the 40-year limit, according to the sources.

The plant’s extended operation could prove to be a big headache for local governments nearby.

Municipalities within a 30-kilometer radius are required to draw up evacuation plans to prepare for a contingency in the post-Fukushima crisis years.

Hammering out workable plans for close to 1 million residents in the area is expected to be difficult, the sources said.

Even the Ministry of Economy, Trade and Industry, which oversees the nuclear industry, is cautious about the extension.

“The consequences would be too enormous if an accident did occur,” said a ministry official.

(This story was written by Tsuneo Sasai and Yusuke Ogawa.)